3 ms·

I'm fascinated by this topic. How do the legacy-type families do it? I'm talking your Kennedies, your Bushes, etc. Preserving wealth and power for generation

I'm fascinated by this topic. How do the legacy-type families do it? I'm talking your Kennedies, your Bushes, etc. Preserving wealth and power for generations?

mrcsparker 10y ago
Education
ChuckMcM 10y ago
The same way "legacy type" universities, or "legacy type" companies do it. An institution is a set of processes, governing rules, and feedback mechanisms which serve to reinforce the core mission. Individual (fallible) control is ceded to the rules and processes in exchange for ensured existence. Harvard University is a good example of a durable institution, look at how its bylaws and processes protect its mission, but more importantly how its feedback mechanisms try to identify and purge potential threats to the institution. In a lot of ways it is similar to programming, only with people who can be modeled as unreliable computers which don't always follow their instructions. So you need interconnected missions of individuals to support the institution's mission. At some point if you have enough individuals who are off script the institution will fail, but with clever process and incentive one can minimize that risk.
pstuart 10y ago
W.R. Hearst set up a family trust with limited control by family members.
billmalarky 10y ago
An excerpt from http://www.forbes.com/sites/carlodonnell/2014/07/08/how-the-1-billion-kennedy-family-fortune-defies-death-and-taxes-3/#126ba756238d http://www.forbes.com/sites/carlodonnell/2014/07/08/how-the-... "Joseph P. Kennedy’s choice to place his fortune in trusts is possibly the single most critical reason why the family wealth is still around today. The most obvious benefit was to protect the fortune from the prying fingers of ne’er-do-well heirs, said Laurence Leamer, who wrote three Kennedy biographies. Trusts often prevent beneficiaries from tapping more than 10 percent of principal, said Rick Kruse, principal at Kruse and Crawford, which offers estate management advice. The trusts also protect the family assets from another set of prying fingers: Uncle Sam’s. By holding assets in so called “dynasty trusts,” which are passed from heir to heir for decades, if not longer, the Kennedy family fortune is largely insulated from the estate tax, Kruse said. Handled correctly, a dynasty trust could potentially maintain an un-taxable fortune indefinitely. The oldest Kennedy trust on record dates back to 1936."

I'm fascinated by this topic. How do the legacy-type families do it? I'm talking your Kennedies, your Bushes, etc. Preserving wealth and power for generations?

mrcsparker 10y ago

Education

ChuckMcM 10y ago

The same way "legacy type" universities, or "legacy type" companies do it. An institution is a set of processes, governing rules, and feedback mechanisms which serve to reinforce the core mission. Individual (fallible) control is ceded to the rules and processes in exchange for ensured existence. Harvard University is a good example of a durable institution, look at how its bylaws and processes protect its mission, but more importantly how its feedback mechanisms try to identify and purge potential threats to the institution. In a lot of ways it is similar to programming, only with people who can be modeled as unreliable computers which don't always follow their instructions. So you need interconnected missions of individuals to support the institution's mission. At some point if you have enough individuals who are off script the institution will fail, but with clever process and incentive one can minimize that risk.

pstuart 10y ago

W.R. Hearst set up a family trust with limited control by family members.

billmalarky 10y ago

An excerpt from http://www.forbes.com/sites/carlodonnell/2014/07/08/how-the-1-billion-kennedy-family-fortune-defies-death-and-taxes-3/#126ba756238d http://www.forbes.com/sites/carlodonnell/2014/07/08/how-the-... "Joseph P. Kennedy’s choice to place his fortune in trusts is possibly the single most critical reason why the family wealth is still around today. The most obvious benefit was to protect the fortune from the prying fingers of ne’er-do-well heirs, said Laurence Leamer, who wrote three Kennedy biographies. Trusts often prevent beneficiaries from tapping more than 10 percent of principal, said Rick Kruse, principal at Kruse and Crawford, which offers estate management advice. The trusts also protect the family assets from another set of prying fingers: Uncle Sam’s. By holding assets in so called “dynasty trusts,” which are passed from heir to heir for decades, if not longer, the Kennedy family fortune is largely insulated from the estate tax, Kruse said. Handled correctly, a dynasty trust could potentially maintain an un-taxable fortune indefinitely. The oldest Kennedy trust on record dates back to 1936."